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Press Statement

Quarterly National Accounts and International Accounts for Q3 2023

CSO press statement, , 11am

Gross Domestic Product (GDP) fell by 1.9% in Quarter 3 2023

  • Modified Domestic Demand, a broad measure of underlying domestic activity covering personal, government, and investment spending was broadly unchanged in the quarter. 

  • Personal spending on goods and services, a key measure of domestic economic activity, increased by 0.7%. 

  • Multinational-dominated sectors contracted by 3.8% in the quarter with all other sectors decreasing by 0.7%.

  • Exports fell by 2.1% in Quarter 3 (Q3) 2023 while Imports were down by 1.7% leading to a decline in overall Net Exports of 3.1% (-€1.3 billion) in the quarter.

  • Routine updates to GDP in Q4 2022,Q1 2023, and Q2 2023 respectively mean that the Q3 2023 GDP result of -1.9% is the fourth consecutive quarter of decline.

  • The Balance of Payments Current Account recorded a surplus of €20.8 billion in transactions with the rest of the world in Q3 2023, an improvement of €11.2 billion compared with the surplus of €9.6 billion in Q3 2022.

Statistician's Comment

The Central Statistics Office (CSO) has today (01 December 2023) published Quarterly National Accounts and International Accounts results for Quarter 3 (Q3) 2023.

Assistant Director General with responsibility for Economic Statistics, Jennifer Banim, commented:

“In today’s results, Gross Domestic Product (GDP) is estimated to have fallen by 1.9% in July, August, and September (Q3) 2023 driven largely by a contracting multinational-dominated Industry sector. This represented a fourth consecutive quarter of GDP contraction. For Gross National Product (GNP) – a measure of economic activity that excludes the profits of multinationals – a decline of 1.1% is estimated for the quarter. Modified Domestic Demand (MDD) however, a key measure of underlying domestic economic activity, was broadly unchanged in the quarter. 

The globalised Industry sector contracted by 3.5% in Q3 2023 compared with Q2 2023 while the Information & Communication sector increased by 3.1% over the same period. Overall, multinational-dominated sectors activity decreased by 3.8% in the quarter and accounted for 52% of total value added in the economy, compared with a 48% share for all other sectors . 

Domestic Economy

While economic activity decreased for many of the sectors focused on the domestic market, there was a mixed picture overall. The domestically facing Distribution, Transport, Hotels & Restaurants sector and the Construction sector were both down by 1.2% in the quarter while the Agriculture, Forestry & Fishing sector shrank by 15.4% quarter-on-quarter. Finance & Insurance and Professional, Administrative & Support Activities fell by 8.5% and 0.3% respectively in the quarter. The domestically dominated Public Administration, Education & Health sector posted a growth of 1.9% quarter-on-quarter in Q3 2023 while the Real Estate sector expanded by 1.3%. The Arts & Entertainment sector recorded a decline of 1.9% over the same period.

Expenditure in the Economy

Looking at expenditure, Net Exports of Goods & Services fell by 3.1% in Q3 2023 or by €1.3 billion. Capital Investment was down by 7.4% in the quarter driven mainly by a reduction in terms of the value of physical changes in Stocks investment and reflecting lower levels of investment in Machinery & Equipment and Intangible Assets compared with the previous quarter. Government spending on goods and services increased by 1.7% in Q3 2023, while personal spending on goods and services (the PCE indicator) rose by 0.7% in the quarter. Examining PCE at constant price levels over the past three years, personal spending in Q3 2023 of €32.3 billion was 9.9% above the peak pre-pandemic level of personal spending recorded in Q2 2019.

Impact of Globalisation and the Indicators of Underlying Domestic Activity

Final Domestic Demand (FDD), a measure of personal, government and investment spending, decreased by 0.7% in Q3 2023, reflecting a mixed picture with Personal and Government consumption rising in Q3 2023 while investment spending fell compared with the previous quarter. In Q3 2023, the Modified Domestic Demand (MDD) indicator was broadly unchanged compared with Q2 2023. MDD is an important measure of underlying demand and excludes significant key globalisation effects for Ireland from the standard Final Domestic Demand measure.

International Accounts

In the International Accounts, the Current Account of the Balance of Payments recorded a surplus of €20.8 billion in flows with the rest of the world in Q3 2023, an improvement of €11.2 billion compared with the surplus of €9.6 billion in Q3 2022. The Merchandise balance dis-improved by €16.2 billion in Q3 2023 compared with the same quarter in 2022 while the Services balance improved by €10.6 billion. Net outflows of multinational profits were €20.9 billion in the quarter, a fall of €15.6 billion on Q3 2022 levels.”

Results for the Year-To-Date (Jan to Sept 2023 compared with Jan to Sept 2022) and Revisions

Analysing the period from January to September 2023, National Accounts Statistician Gordon Cavanagh commented:

“Results for the Year-To-Date 2023 (Jan – Sept 2023) compared with the equivalent period of 2022 show GDP declining by 1.3%. Factor income outflows were €19.4 billion lower than in the first nine months of 2022, leading to an overall increase in GNP of 6.0% for the first nine months of 2023 compared with the equivalent nine months of 2022. On a Non-Seasonally Adjusted basis, the GDP result for Q1 2023 has been updated from 1.1% to 2.6% (an upward revision of +1.5%) with GDP for Q2 2023 revised from -0.7% to -0.3% (an upward revision of +0.4%).

In the globalised sectors, there was a mixed picture. Expansion continued in the Information & Communication sector, which was up by 8.1% in Jan-Sept 2023 compared with Jan-Sept 2022, while the Industry sector fell by 5.6% over the same period. The Domestic-Facing sectors of the economy such as the Public Administration, Health & Education sector grew by 4.0% in the nine months to end-September 2023 compared with the same period in 2022.  

Year-To-Date Expenditure in the Economy

Net Exports fell by 5.9% over the period compared with the first nine months of 2022 or €8.6 billion in monetary terms. The 1.6% fall in Imports in the first nine months of the year compared with the same period in 2022 was outpaced by the fall in Exports of 2.9%. Personal spending (PCE) rose by 3.6% in Jan-Sept 2023 compared with the same period of 2022, while Capital Investment was down by 5.5%. Government spending on Goods & Services was broadly unchanged over the period. Final Domestic Demand decreased by 1.7% in the first nine months of 2023 compared with the equivalent period of 2022 while the MDD indicator grew by 0.8% in the same period.”

Editor's Note

“The updated estimate of Real GDP for the Q3 2023 reference quarter indicates a contraction of 1.9%. This compares with a Preliminary GDP Estimate (T+30 day estimate) published on Friday 27 October 2023 that indicated an fall of 1.8% for the quarter. The reason for the revision is that the updated T+2 months QNA estimate includes new information that was unavailable at T+30 timeliness, in particular for sectors including Industry (excluding Construction), Information & Communication, Professional, Administrative & Support Activities, Financial & Insurance services, and Real Estate Activities. Additionally, today’s result is based on both Expenditure and Output data, while the Preliminary estimate, published as a CSO Frontier Series Output, was based predominantly on economic Output data.

Preliminary estimates are published under the CSO Frontier Series which may use new compilation processes which are under development and / or new or more timely data sources and therefore the results may be subject to revision over time. Publishing outputs under the Frontier Series allows the CSO to provide useful new information to users and receive informed feedback on these new methods and outputs whilst at the same time making sure that the limitations are well explained and understood. See a list of our CSO Frontier Outputs.”

Contacts

Christopher Sibley (+353) 1 498 4305
John Sheridan (+353) 1 498 4258
Email nat_acc@cso.ie
Emailinternationalaccounts@cso.ie

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